A spokesman for the New York-based Bug Labs confirmed the new round of financing Tuesday, but he did not disclose financial details of the deal, much like with the company's previous two rounds. Virginia-based Court Square Ventures led the investment.

Union Square was Bug Lab's first venture capital investor in April 2006, shortly after the start-up was founded. Spark Capital, based in Boston, signed on as a stakeholder a year later to help the company finalize its open-source software and hardware platform for electronics. (Red Hat founder Bob Young is also an angel investor.)

Now that Bug Labs started shipping its products this spring, the company raised a third round so that it could expand its engineering staff and marketing efforts, and widen adoption of the products beyond hobbyists or early adopters. It also hopes to grow internationally by the end of 2008.

"We want to get the product in more hands," said Jeremy Toeman, Bug Labs' vice president of marketing.

The idea behind Bug Labs is to give developers relatively inexpensive tools to build electronics. Today, for example, a Web programmer could build a virtual application with relatively little cost beyond the computer itself. A gadget developer, on the other hand, would need to invest significantly to prototype, manufacture, store, and ship their hardware.

Bug Labs aims to remove some of that friction by selling the "guts" of a gadget--or a minicomputer called Bug Base--so that developers don't have to start from scratch. Building from that component, developers can create a gadget of their own, by adding modules like an LCD screen, motion-detector or a 2 megapixel digital camera. The company soon plans to sell a weather module that can read the barometric pressure of the environment. (Bug Labs' kit costs $629, for the base and four modules.)

Do-it-yourself gadgets seem to be spreading around. The Chumby, for example, is a flexible toy with an LCD screen that invites developers to create new applications for it.

Toeman said that the latest funds will also help Bug Labs boost its manufacturing. Earlier this year, the company had a slight delay shipping its products.

"We want to bring electronics well out of the mystical arts to something a lot more accessible," Toeman said.